RYAN AND LOGAN JJ:
1 The appellant, Ms George (neé Cordes), became a bankrupt on 24 February 2006 upon her presentation of a debtor's petition. In the course of the administration of her bankrupt estate a controversy emerged between her and her trustee in bankruptcy, the first respondent, Mr Fletcher as to whether particular real and personal property formed part of her bankrupt estate.
2 By an amended application filed in the Federal Magistrates Court on 7 November 2008, Mr Fletcher, in his capacity as Ms George's trustee in bankruptcy, sought declaratory relief in respect of, materially, Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 (the Moggill property), a Toyota land cruiser with the licence plate 590FXR, VIN Number: JT11UJA509019411 (V), Engine Number: 1FZ0444996 (the land cruiser) and a Hanoverian mare known as "Stellamarra" with the microchip number 939000001109809 (the horse). Ms George was at that time the only named respondent to that amended application. The second to sixth respondents to this appeal were later joined as respondents to that application.
3 Section 27 of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) confers on the Federal Magistrates Court jurisdiction, to make, amongst other orders, a declaration whether particular property is property divisible amongst the creditors of a bankrupt. That jurisdiction is concurrent with the like jurisdiction conferred by that section on this Court. Subject to the jurisdiction invested in the High Court by The Constitution (Cth), that concurrent jurisdiction in bankruptcy is exclusive, ie the Supreme Courts of the several States are no longer, as they for many years were, invested with Federal jurisdiction in bankruptcy.
4 On 9 February 2009 the Federal Magistrates Court made declarations and orders relating to this property: Fletcher v George (No 6) [2009] FMCA 69. Those declarations and orders were as follows:
The Court declared:
1 That the Heads of Agreement dated 19 February 2008 and exhibited at WJF-8 to the Affidavit of William John Fletcher sworn 29 October 2008 remains valid and enforceable.
2 That as at 24 February 2006 the legal and beneficial ownership of Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 vests in Applicant as trustee of the bankrupt estate subject to the registered mortgage number 710055137 registered in favour of National Australia Bank Ltd ABN 12004 044 937.
3 That as at 24 February 2006 the legal and beneficial ownership of the Toyota landcruiser with the licence plate 590FXR, VIN Number: JT11UJA509019411 (V), Engine Number: 1FZ0444996 vests in Applicant as trustee of the bankrupt estate.
4 That as at 24 February 2006 the legal and beneficial ownership of the Hanoverian mare known as Stellamarra with the microchip number 939000001109809 vests in the Applicant as trustee of the bankrupt estate.
5 That Deed of Settlement between the Applicant and Susan Jane Wilson dated 28 October 2008 remains valid and enforceable and that it be performed.
The Court ordered:
6 That the application be adjourned for trial on issues arising from relief sought concerning title to chattels and related property stored at or located at Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 and in respect of relief sought in paragraphs 4 and 10 of the amended application.
7 That there be no order as to costs between the Fifth Respondent and the other parties to the application.
8 That in respect of Order 7 of these Orders there be liberty to apply by the First Respondent, Lauren Kay George.
9 That each party making an application for costs against any other party to the application file and serve upon the other party the subject of such application a written outline in support of such application, including a minute of proposed orders, on or by 4.00pm on 13 February 2009.
10 That any person in possession or control of the horse Stellamara with the microchip number 939000001109809 part with possession of the horse into the power of the applicant Trustee in Bankruptcy for Lauren Kay George or his nominee forthwith upon such demand by such person for possession of that horse.
11 That the application be adjourned for further mention to 9.30 am on 25 February 2009 in the Federal Magistrates Court of Australia at Brisbane.
5 Ms George subsequently applied to a judge of this Court for leave to appeal against those declarations and orders numbered 1, 2, 3, 4, 5, 6, 9 and 10. On 25 March 2009 a Judge granted her leave to appeal against those declarations and orders: George v Fletcher (Trustee) [2009] FCA 264. The operation of those declarations and orders was stayed pending the hearing and determination of the appeal.
6 A draft notice of appeal containing 17 proposed grounds of appeal was before the Court at the time when the leave to appeal application was heard. The assessment of the proposed grounds of appeal in the reasons for judgment in respect of the granting of leave is compressed. Her Honour observed (at para 16):
In this case the Federal Magistrate has delivered a thoughtful and thorough judgment in circumstances where not only was one of the key parties to this complex litigation (Ms George) without legal representation, but a great deal of information generated by Ms George was before his Honour. However, I consider that the issue raised by Ms George as to whether all of her evidence was properly available to the Federal Magistrate during the time his Honour was preparing the judgment, and therefore whether all of that evidence was taken into consideration by his Honour in his judgment, raises a question of justice such that an appeal from the decision of his Honour should be heard. [Emphasis added]
7 Ms George argued the appeal herself. She was similarly unrepresented on the application for leave to appeal, in the court below and in then parallel proceedings in the Queensland Supreme Court concerning the title to the Moggill property, the horse and the land cruiser. The notice of appeal is prolix. The following are the grounds specified in the notice:
The solicitor for the 1st Respondent mislead his honor the courts and his client by providing false and misleading evidence in non compliance of the rules of the court in a pursuit of ulterior motives resulting in the following injustice to the appellant;
1 His Honor erred in not allowing the appellants matter to proceed to trial witnesses to be called pleadings to close and defense and right of reply to defense to be finalized - resulting in a denial of Justice and Due process to the appellant.
2 His Honor erred in allowing the first Respondent to proceed with a summary judgment against the appellant without serving the appellant in accordance with rule no 5.02 which in turn caused prejudice to the appellant and further denial of Justice and Due Process.
3 His Honor erred in not hearing the appellant's objections to inadmissible evidence filed by the first Respondent which in turn caused prejudice to the appellant and a further denial of Justice and Due Process.
4 His Honor erred in hearing the first Respondents application-raising an issue of estoppel from the matter being trialed twice as this issue had been partly determined and heard in the Supreme Court on the 16th July 2008 and 5/9/08 in response to the same application of the first respondent dated 2/5/08. Orders were made that the summary judgment application must be adjourned until determination of the trial question originally set down for hearing on the 3-5 November now due to be determined on the 18/20 of February 2009 in the Supreme Court.
5 His Honor erred in finding the evidence did not support the need to proceed to trial when no less than 2 High Court judges namely Justice Daubney on the 9/5/2008 and Justice Martin on the 16/7/2008 after perusal of the evidence made findings that "there is a serious question here and this matter needs to proceed to trial" His honor further made error in not reading the appellants evidence in chief as documents numbered 16,17,25,38,39,47,69 to support the trust were held in the Supreme court in preparation for trial next week and were not available to his honor when making the summary judgment which is reflected in his referencing of documents resulting in a multitude of errors and facts.
6 His Honor erred in proceeding to determine the application in the absence of the appellant's evidence which was largely not before him and not available until after the trial of the matter in the Supreme court on the 20/2/2009.
7 His Honor erred in his decision to not hear the matter of fraud which forms a remedial constructive trust until after the determination of the summary judgment.
8 His Honor erred in his decision to not hear the pleadings on the constructive trust created by the plaintiff in her capacity as trustee who made $120000-00 in payments to the construction of the Moggill dwelling for the benefit of the trust after the date of the agreement 18/6/2005.
9 His Honor erred in not adjourning the matter and allowing the parties to proceed on the 9/2/2009 in the absence of the appellant and not in accordance with rule 13.03c (1) (a). Resulting in the injustice to the appellant when handing down a summary judgment in the absence of the appellant who had been served with a signed with a signed seal order of the court stating the next hearing dates were to be the 8-10 March 2009 and not the date mentioned above.
10 His Honor erred in not setting aside the orders of the court dated 9/2/2009 under rule 16.05 (2)(a) as requested by the appellant prior to the appeal being filed.
11 The above circumstances resulted in his Honors error of hearing the summary judgment at its lowest case as described by the first respondent and not at its highest case as consented too by the parties resulting in Prejudice to the appellant.
12 His Honor erred in allowing the parties to inappropriately forum shop judges to seek advantage in their proceedings and create prejudice to the appellant by way of;
a/ allowing illegal exparte application's by the 1st respondent not in accordance with the rules of the court to obtain advantage in the proceedings.
b/ by filing misleading and false affidavits in relation to notification of service of hearing date 9/2/2009 and other matters of bankruptcy.
c/ allowing the 1st respondent to illegally seize assets that have never been owned by the appellant and obtain consent orders by way of unconscionable acts placing third parties under duress to sign by way of threats which his honor wilfully shut his eyes too and refuses to hear the evidence thus resulting in a denial of justice to the parties and appellant.
d/ refusing to hear the appellant's applications made under 178 of the bankruptcy act therefore sending these issues to the appeals court unnecessarily.
13 His Honor erred in allowing the Heads of Agreement to proceed when this matter has already been partly heard and determined on the 16/7/2008 findings made on the 5/9/08 in the Supreme Court of Brisbane and is therefore an issue of estoppel. Resulting in Prejudice to the appellant by hearing the matter twice;
a/ and willfully shutting one's eyes to the fact the agreement was made not in accordance with the rules of mediation and under unconscionable circumstances by the first respondent solicitor. Who has a history of recorded findings of misconduct made against him by the legal practitioners licensing board and is presently under investigation by the legal commission and the police prosecutor for threatening behaviour against the appellant and continues to mislead his honor and the courts in this matter.
14 His Honor erred in dismissing the appellant's application for his honour to stand down from the matter on the 8/12/2009 thus resulting in further injustice and prejudice to the appellant and today's appeal.
15 His Honor erred when advising the appellant the matter of the horse will proceed to trial but failed to do so.
16 His Honor erred when not hearing the evidence and sending the matter to trial for the unconscionable conduct displayed by the first respondent's solicitor in negotiating consent orders under duress and not in good faith following assets; horse, car, float.
17 His Honor erred in allowing the first respondent to bring on a spurious vexatious oral application in court to strip the appellant of the $50 of jewellery she was wearing to court that day which the appellant had received no service for in accordance with rule no 5.02.
[sic]
8 Judged by reference to the observation, emphasised by us in the passage quoted above, made in the Court's reasons for judgment for granting leave to appeal, the grounds specified in the notice of appeal are not just prolix but also travel well beyond what was seemingly intended by her Honour to be the subject of the grant of leave to appeal. Yet the order granting leave limits the grant of leave to appeal only by reference to particular identified paragraphs of the order of the court below, not by reference to any particular grounds of appeal.
9 In instituting an appeal Ms George did not thereby commission a roving inquiry into the administration of her bankrupt estate or each aspect of the course of proceedings either in the court below or, as will be seen, in the Supreme Court of Queensland; she invoked appellate jurisdiction. That jurisdiction falls to be exercised by reference to the grounds identified in a notice of appeal.
10 At the time when the application for leave to appeal was heard in March last year, as now, O 52 r 4 of the Federal Court Rules required the application for leave to be accompanied by an affidavit showing:
(a) the nature of the case;
(b) the questions involved; and
(c) the reasons why leave should be given.
Ordinarily, the questions involved would be identified in a draft notice of appeal exhibited to that affidavit. An order granting leave to appeal would, in turn, ordinarily be cast by reference to so much of the questions so identified as were considered to warrant a grant of leave. The observation made in the reasons for judgment for the grant of leave to appeal may have taken the form it did because of the way in which the application for leave was argued. It does not though, in terms, explain why the order granting leave was not limited accordingly.
11 The notice of appeal replicates the grounds proposed in the draft at the time leave to appeal was sought. Given the way in which the order granting leave is expressed, Ms George is hardly to be criticised for thinking that each of her proposed grounds was indeed the subject of the grant of leave. None of the respondents submitted that Ms George should be confined on the hearing of the appeal to the question identified by her Honour in the passage emphasised in the extract quoted above. Instead and in summary, their approach was that the learned federal magistrate had not made any error either in procedural or substantive law in making the declarations and orders on 9 February 2009.
12 As the hearing of the appeal evolved, it became apparent that each party considered that the determination of the following issues would resolve the appeal:
(a) Did the learned magistrate err procedurally in determining summarily so much of the bankruptcy trustee's application as related to the Moggill property, the Heads of Agreement, the horse and the land cruiser, including whether, in so doing, there was a denial of procedural fairness?
(b) Did the learned magistrate err in law in making the declarations and orders as to the Heads of Agreement and also whether the Moggill property, the horse and the land cruiser were part of the property of the bankrupt?
It will also be necessary to make some observations about a further issue which Ms George sought to agitate on the appeal, which was whether, as she had requested at the hearing, the learned federal magistrate ought to have disqualified himself from the further hearing of the matter because there existed a reasonable apprehension of bias.
13 Answering these questions will, we apprehend, address the issue which apparently engaged her Honour's interest when granting leave as well as such wider questions as the parties themselves considered were raised by the appeal, having regard to their submissions. It will also answer the questions of substance that lie behind the prolixity of the notice of appeal. We consider that the interests of justice are best served by approaching the determination of the appeal in this way.
14 Answering these questions requires us to detail the history of this matter in the court below and the learned federal magistrate's reasons for making the declarations and orders in question. It also requires us to describe in greater detail the proceedings in the Queensland Supreme Court to which Ms George, Mr Fletcher and others are parties.
15 At the time when the bankruptcy trustee's application to the Federal Magistrates Court was filed there was already a proceeding in the Queensland Supreme Court concerning the Moggill property, the land cruiser and the horse: Lauren Kay Cordes as Trustee for Alexander George v Dr Peter Ironside P/L & Ors, SC No 3747 of 2008. An appeal from a judgment given in that court's Trial Division in that matter was awaiting determination at the time when the appeal was argued before us. It has since been determined. Given the common substratum of facts and issues and the interplay between the Queensland Supreme Court proceeding and that in the court below, we considered it prudent to defer the determination of this appeal until the Queensland Court of Appeal had given judgment and to afford the parties an opportunity to make such supplementary submissions as they might have been advised as to the consequences for the present appeal of the judgment of the Queensland Court of Appeal. We have taken those supplementary submissions into account.
16 A summary, which we gratefully adopt, of the parties to, and issues in, the Queensland Supreme Court proceeding is offered by Holmes and Chesterman JJA in Lauren Kay Cordes as Trustee for Alexander George v Dr Peter Ironside P/L [2009] QCA 302 at [7]-[12] in dismissing an appeal by Ms George against an order made in the Queensland Supreme Court's Trial Division permanently staying that proceeding:
[7] The action in this Court was commenced in April 2008. The parties named in the claim were the appellant, "Lauren Kay Cordes as trustee for Alexander George"; the company; Dr Ironside; the National Australia Bank; and (by later inclusion) the trustee in bankruptcy. (An attempt by the appellant to join her sister, the ex-wife of Dr Ironside, was unsuccessful.) In her statement of claim (as amended), the appellant pleaded that she had created a trust in 1998 in favour of her infant son, Alexander George, and had settled the Moggill property on him by means of a "signed trust deed" on 16 February 2003.
[8] The pleading as to the arrangement between Dr Ironside, the company and the appellant is very difficult to understand. The thrust of it seems to be that the company was to pay $400,000 and the Moggill property, subject to an existing mortgage to the National Australia Bank, was to be transferred to it, but leased back to the appellant. Strangely, the tenancy agreement also provided that she and her son were to retain a life interest in the property. At the same time, however, the arrangement was conditional on the company's holding the property in trust for her son, and undertaking to transfer it back to the appellant at any time she wished.
[9] The appellant went on to plead that unconscionably, in breach of trust and in breach of their agreement, Dr Ironside and the company refused to reconvey the property, used it as security for loans in the amount of $2 million, lodged a caveat on the title, and entered the Family Court agreement with the trustee in bankruptcy. The National Australia Bank was joined as an accessory to their breach of trust. Against the trustee in bankruptcy, it was pleaded that he knowingly assisted in the breach of the trust by failing to reconvey the property and asserting his interest in it. The appellant alleged that she had signed the Family Court agreement under duress.
[10] By way of relief, the appellant sought orders setting aside the sale agreement, the transfer of the property to the company and the mortgage to the National Australia Bank, with removal of the caveat and the mortgage, and orders that the Moggill property be reconveyed to her "in fee simple and life estate" and the land title register corrected accordingly. In the alternative, she asked for declarations that the transfer, mortgage and Family Court agreement were invalid, and an order for specific performance of the agreement between her, the company and Dr Ironside, by way of a registered transfer of the property to her. In addition, she sought damages against Dr Ironside, the company, and the National Australia Bank.
[11] Part of the statement of claim concerned chattels seized by the trustee in bankruptcy. They included a horse and a motor vehicle, both of which the appellant said were owned by her sister, who had agreed to give the appellant "life use" of them. The trustee in bankruptcy had also seized a horse float, some smaller personal items belonging to the appellant and a rocking horse belonging to the appellant's son. The appellant pleaded that the trustee executed warrants (one assumes for the purpose of recovering property), in the process "breach[ing] legal privilege", resulting in "valuable stolen jewellery and damages to the Moggill property". A further allegation is that the trustee refused to allow her to take action to set aside a costs assessment notice, in respect of legal fees which were the cause of her bankruptcy, and but for which she could achieve a discharge.
[12] The appellant sought specific performance of the agreement to allow the appellant life use of the horse and vehicle, the setting aside of the consent orders made for transfer of that property to the trustee with a declaration that it remain vested in her sister, not the trustee, and return of the rocking horse. At the hearing before the learned primary judge, however, in order to deflect the argument about bankruptcy jurisdiction, the appellant disavowed other forms of relief sought in the statement of claim. They were: a declaration that the Moggill property did not vest in the trustee in bankruptcy; declarations that the vehicle and the horse float vested in her (the former as trust property, the latter as "tools of trade"); declarations that warrants were illegally executed and that a solicitor for the trustee in bankruptcy "breached legal privilege"; a declaration that she "be discharged" in February 2009, three years after she became bankrupt; an order for return of her personal items; damages resulting from the seizure of assets; the setting aside of the costs assessment notice which had caused her bankruptcy; and a declaration that she was illegally detained (the connection of which to the pleading is obscure).
17 As will be seen, the allegations made by Ms George in the amended statement of claim in the Queensland Supreme Court, which are summarised in this extract, came to have a particular importance in the proceeding in the Federal Magistrates Court by virtue of directions which that court made and by virtue of the way in which it dealt with a summary judgment application made by the bankruptcy trustee.
18 The reference in this extract from the joint judgment to "the appellant's sister" is a reference by their Honours to Ms Susan Wilson, the fifth respondent in the appeal to this Court. Ms Wilson is, as their Honours record, the former wife of Dr Ironside, the third respondent in the appeal to this Court. The "Family Court agreement" referred to in the extract is an agreement pursuant to which issues in relation to the Moggill property were, at least purportedly, settled by the signing of an agreement titled "Heads of Agreement" by all who later came to be parties to the proceedings in the Supreme Court and in the court below, except for the fourth respondent, the National Australia Bank (the Bank). It is to those "Heads of Agreement" which the declaration made by the Federal Magistrates Court refers. Under that agreement, Ms George abandoned any claim to the Moggill property and it was agreed, inter alia, that the second respondent, Dr Peter Ironside and the third respondent, the company which bears his name (DPIPL) would do all things necessary to transfer the Moggill property to the bankruptcy trustee to allow him to sell it.
19 Materially for present purposes, having regard to s 27 and s 31 of the Bankruptcy Act and to Scott v Bagshaw (2000) 99 FCR 573 and Meriton Apartments Pty Ltd v Industrial Court of New South Wales (2008) 171 FCR 380, the Court of Appeal upheld a conclusion reached in the Trial Division that the Queensland Supreme Court did not have jurisdiction to determine a controversy as to whether the bankruptcy trustee had title to the Moggill property, the horse and the land cruiser; rather, that jurisdiction was exercisable only by this Court or the Federal Magistrates Court.
20 On 4 November 2008 the bankruptcy trustee's application was listed for hearing in the Federal Magistrates Court on 8 December 2008 for three days. At the same time that court made orders, amongst others, that:
(a) each party to give discovery in respect of categories of documents listed in schedule A to the order within 28 days;
(b) Ms George be committed to prison.
21 The order of committal seemingly related to a failure by Ms George to answer a question in relation to the whereabouts of the horse. That committal order is not the subject of this appeal. It is noteworthy though that Ms George was not released from custody until 12 November 2008, apparently on the basis of her undertaking that the horse would be kept safe and not transferred or encumbered pending the hearing and determination of the bankruptcy trustee's application. Also noteworthy is that the limit of time specified by the order in respect of discovery expired on 5 December 2008, a Friday, with the trial fixed to commence on the following Monday.
22 On 18 November 2008 the Federal Magistrates Court refused an application by Ms George to stay the bankruptcy trustee's amended application pending the hearing and determination of the Queensland Supreme Court proceeding: Fletcher v George (No. 5) [2008] FMCA 1628. At the same time the Federal Magistrates Court gave directions in respect of the hearing of that amended application, the effect of which was that the amended statement of claim which Ms George had filed in the Supreme Court proceeding stand as her pleading in respect of the bankruptcy trustee's application, subject to such additions or variations as she might specify to the parties on or before 21 November 2008. It was further directed that documents filed in the Supreme Court proceeding be taken to be filed in the bankruptcy trustee's application. The directions then made also anticipated the possibility that Ms George might make additions or variations by a further direction that she additionally file and serve on or before 21 November 2008 copies of any documents to be relied upon by her. In that event, other parties were given until 28 November 2008 to file any affidavits and supporting material. The evident intent of these directions was to avoid putting the parties to the expense of further preparing material which already had been filed in the Queensland Supreme Court and to allow for the supplementation of that material should a party be so advised.
23 It is evident from the reasons which the learned federal magistrate delivered on 18 November 2008 that his Honour considered that there was a common substratum of facts and issues as to title to property in the proceeding before the Federal Magistrates Court and in the then proceeding before the Supreme Court and that the determination of the questions raised involved an exercise of jurisdiction "in bankruptcy". It seems to have passed unnoticed by all concerned that day that the times fixed for the filing of any further material were shorter than the maximum time limited by the order of 4 November 2008 for the giving of discovery.
24 When the forthcoming trial in the Federal Magistrates Court was drawn to the attention of the Queensland Supreme Court that court vacated a review hearing which had been scheduled to occur on 8 December 2008 in respect of the proceeding in that court with liberty to restore the matter to the list on 14 days notice. In so ordering the learned supreme court judge observed that the proceeding in that court was nowhere near ready for trial. That observation, we feel sure, influenced Ms George's thinking in relation to the readiness for trial of the Federal Magistrate's Court proceeding.
25 Ms George sought from this Court leave to appeal against the Federal Magistrates Court's refusal on 18 November 2008 to stay its proceedings. That application was, in light of the then imminent substantive hearing in the Federal Magistrates Court, heard urgently. Leave to appeal was refused: George v Fletcher (Trustee) [2008] FCA 1848.
26 Pursuant to the listing order of 4 November 2008, the bankruptcy trustee's amended application came on for trial in the Federal Magistrates Court on 8 December 2008.
27 That trial was not, with respect, conducted or continued in what one might term a conventional way. By that we mean that, after the announcement of appearances, and subject to the resolution of any adjournment or other initial application, the bankruptcy trustee, as the applicant in the court below, was not called upon to open his case, identify the material upon which he relied as evidence in chief, deal with objections, if any, to that material and then successively produce for cross examination such witnesses as had by notice been required to attend for that purpose. Nor was that followed then by calling upon each respondent to present, as the case may be his, her, or its case. The adoption of an unconventional procedure has had the unfortunate effect of adding a conjectural element to delineating precisely what constituted the material before the court below for the purposes of the trial and the summary judgment application.
28 This departure from convention seems, in no small part, to have been a reaction to the very particular challenges presented in dealing with Ms George. Judging by the transcript, she was querulous. Ms George also appeared on the hearing of the appeal. With all due respect to her, we do not underestimate the challenges which the learned federal magistrate faced in conducting a trial in respect of the bankruptcy trustee's amended application. Litigants in person not infrequently present particular challenges not just for judicial officers but also for the lawyers for represented parties in the orderly conduct of a proceeding. Here, those challenges were compounded not just by a querulous litigant in person but also by the then co-existence of the Queensland Supreme Court proceeding brought by Ms George.
29 The learned federal magistrate questioned the bankruptcy trustee and the other respondent parties as to their respective positions. In essence the response of the bankruptcy trustee and the respondents other than Ms George was that none sought to run a "positive case". The bankruptcy trustee contended that the Moggill property had never been held in trust. Dr Ironside and DPIPL sought to rely upon the Heads of Agreement and the Bank joined with this but further contended that it had, irrespective of interests in the Moggil property claimed by other parties, a mortgage security registered on the title in good faith and without any prior notice.
30 After quite some exchanges between the various parties and the learned federal magistrate the bankruptcy trustee made an oral application for so much of that application as concerned in whom the Moggill property, the land cruiser and the horse were vested to be determined summarily on the basis that Ms George's response to the bankruptcy trustee's amended application had no reasonable prospect of success. That response, as envisaged by the interlocutory directions, took the form of the statement of claim in its then amended form which she had filed in the Queensland Supreme Court.
31 Save for Ms George, the respondents to the bankruptcy trustee's amended application (the second to fifth respondents to this appeal) each contended that Ms George's case, taken at its highest, did not support her assertion that each of these items of property was, at the commencement of her bankruptcy, held by her in trust. The submissions made by the bankruptcy trustee in respect of the summary judgment application were not confined in their scope to whether Ms George's amended statement of claim, if viewed as a response to the bankruptcy trustee's amended application, raised any triable issue. Rather, those submissions extended to taking at their highest a series of documents which formed part of Ms George's evidence in the Queensland Supreme Court in respect of her allegation that the Moggill property was held on trust by her. A corollary of the submissions, so far as the Heads of Agreement was concerned was that Ms George had no interest as trustee or otherwise to compromise so that whether her agreement had been given under duress or otherwise was irrelevant to the efficacy of that agreement. The submissions attributed to Ms George's case in the Federal Magistrates Court had nothing more than an evidentiary content derived from affidavits already filed in the Queensland Supreme Court.
32 Ms George did not support that manner of disposition of the bankruptcy trustee's amended application in the court below. She requested that the bankruptcy trustee's amended application proceed to a full trial. Consistently with that position she had filed by leave on 8 December 2008 an application which sought compliance by the bankruptcy trustee, DPIPL and the Bank with notices requiring "disclosure" of documents. It is evident from the references in this application to the Uniform Civil Procedure Rules (Qld) (UCPR) and from an alteration to its heading that it was originally prepared for use in the Queensland Supreme Court proceeding. In context though it was plainly a complaint by her about compliance by those respondents with the terms of the order with respect to discovery made by the Federal Magistrates Court on 4 November 2008. The application for summary judgment was apparently viewed by those respondents as a way of rendering unnecessary consideration of Ms George's complaint concerning discovery.
33 In the course of making her submissions, Ms George requested that all of the issues in her statement of claim in the Queensland Supreme Court in its then amended form be heard in the Federal Magistrates Court. Even as then amended, those issues were as summarised in the extract from the Court of Appeal's judgment, quoted at [16] above. At various times, she foreshadowed calling an expert witness, four officers of the bank by subpoena and later "8 witnesses". His Honour asked her whether she was applying for an adjournment of the trial. Ms George replied that she was not but rather that she was applying for "trial directions". It is obvious from the transcript that she misunderstood the import of his Honour's question. As a layperson acting for herself that in no way stands to her discredit for it is equally obvious from the answer that she gave that she was seeking, in substance, an adjournment of the trial and the making of further interlocutory directions. Apart from Ms George's complaint about "disclosure", another basis for her adjournment application was that, since the trial dates had initially been appointed on 4 November, she had been in custody until 12 November 2008 which had inhibited her ability to prepare for the trial.
34 On 9 December 2008 Ms George made an application for the learned federal magistrate to disqualify himself on the basis that there existed a reasonable apprehension of bias. His Honour dealt with that application. For reasons which he gave ex tempore, his Honour declined the application.
35 The upshot was that, having declined the invitation to disqualify himself, the learned federal magistrate decided to proceed with the bankruptcy trustee's application for summary judgment. On 10 December 2008 his Honour reserved judgment on that application. At the same time his Honour appointed 9 February 2009 as the date for a three day trial of the other outstanding issues on the applications before the Federal Magistrates Court.
36 The sealed copy of the order recording the adjournment to 9 February 2009, pronounced orally on 10 December 2008, initially and erroneously recorded the adjourned hearing's commencement date to be 9 March 2009. This error was corrected by an amendment of the order on 12 January 2009. In her submissions before us, Ms George acknowledged receipt of the listing order in respect of the adjournment in its original, erroneous, form but asserted that she was not aware of any hearing to be held in February 2009.
37 In the meantime, on 23 December 2008, Ms George had filed an "amended statement of claim" in the Federal Magistrates Court. A like document was apparently also filed at about that time in the Queensland Supreme Court proceeding. The extract which we have quoted above from the joint judgment delivered in the Court of Appeal summarises Ms George's statement of claim in this amended form. Over the course of January 2009 there were also filed in the Federal Magistrates Court an amended defence by the bankruptcy trustee, an amended defence and counterclaim by Dr Ironside and DPIPL and an amended defence by the Bank. Each of these was a replication of a like pleading which those parties had respectively filed at that time in the Supreme Court. That these amended pleadings would be filed after judgment had been reserved on the application for summary judgment seems to have been anticipated by all concerned at that time.
38 On 4 February 2009 the bankruptcy trustee's application and other then outstanding matters were listed for mention in the Federal Magistrates Court on the initiative of the learned federal magistrate. Each of the parties except Ms George appeared that day.
39 The occasion for the mention was that, after judgment on the summary judgment application had been reserved, the Queensland Supreme Court had requested the return of its file in respect of the proceeding in that court. That proceeding had been dormant following the vacation in November 2008 of the date fixed for the review hearing in that court but since then had been revived to permit a hearing in respect of a number of separate questions. That hearing came on in February 2009, after the Federal Magistrates Court had given the judgment the subject of this appeal. In the result, the Queensland Supreme Court Judge hearing the separate questions formed the view that those questions were not apt for separate determination and sent the matter off to trial. That trial occurred in April 2009. It was from the judgment at that trial that Ms George appealed to the Court of Appeal.
40 Inferentially, the request of the Federal Magistrates Court by the Queensland Supreme Court for the file's return may well have been due to the need to place the amended pleadings on that court's file in readiness for the then pending hearing in respect of the separate questions. In any event, the file was returned as requested but this had left the Federal Magistrates Court without the material which, by its earlier direction, was taken to be material filed in relation to the bankruptcy trustee's application.
41 The transcript of 4 February 2009 discloses that the learned federal magistrate was aware of the filing after 10 December 2008 in the Federal Magistrates Court of the amended statement of claim by Ms George and made aware by counsel then appearing for the bankruptcy trustee of the filing of "a response" to that pleading by his client. The transcript records an exchange between that counsel and the learned federal magistrate about further trusts alleged by Ms George in the latest version of her statement of claim and of investigations undertaken by the bankruptcy trustee which were said to disclose that the properties concerned were, according to the relevant certificate of title, held by her in her own right or by her and her then husband in their own right.
42 Further, after reference to the reclaiming of its file by the Queensland Supreme Court, the transcript records the following exchange between the learned federal magistrate and counsel for the bankruptcy trustee:
FEDERAL MAGISTRATE: Well, these properties [referring to properties in South Australia once held by Ms George] have been sold, haven't they?
MR KELSO: Yes, many, many, many years ago.
FEDERAL MAGISTRATE: Yes, I thought so. Okay. So that's why I'm not unduly troubled - although I'd like to see the trust deeds - because I imagine the argument would be that any trusts may - or everything may have moved into the later transactions so - but ultimately I'll hear parties on that point on Monday if people want to take - or want to advance any arguments in relation to that.
I'm conscious that - well, my associate informs me that somebody has informed her that there will be objection to the statement of claim. Can I indicate that I would like to dispose of the claim, accepting the statement of claim, if it's at all possible. So if the parties could make their best endeavours to see if there really are any significant issues of substance that arise on the statement of claim so that they might focus their objections on those matters.
Okay. Well, I'll put the statement of claim to one side. But the next matter I wanted to hear the parties on was really this. Can I indicate to the parties that I am about 95 per cent finished - through the exercise, after my judgment, I have a couple of minor issues to deal with. They in part relate to material that was on the Supreme Court file. Not to suggest that there's a turf war on here between this Court and the Supreme Court, but the files were returned to the Supreme Court and the Supreme Court has indicated they won't be returned to this Court unless somebody brings a cross vesting application.
I don't think that's necessary. For a start, I'm not anxious to hear a claim by Ms George as the trustee which she wants to prosecute. Not that I - and in any event, you'd have to bring your cross vesting application in the Federal Court to get orders and then have the matter transferred back to me. So it's a complicated process. But I don't think it's necessary in any event.
All I need to see are a couple of affidavits. What I'd like the parties to do if they could please is look at the Supreme Court file and photocopy and make available for me and I'll mark as exhibits when we resume on Monday any of those affidavits which the parties think should be before me for the purpose of dealing with the application.
There would in my mind be two in particular. There is an affidavit referred to as being sworn by Ms Cordez in the Supreme Court proceedings on 26 September 2008. The reference in the transcript doesn't give me a filing date I'm afraid so it will be something after 26 September. And there's also a reference in the transcript to an affidavit by Ms Cordez concerning a resulting trust. It seems to be an affidavit which she filed in those proceedings in support of her assertion that there is a resulting trust in her favour or somebody's favour, I'm not sure how she addresses it. But in any event, that's how the transcript reads.
I am obviously keen to see both parties' affidavits and any other affidavits which the parties might think are relevant and are on the Supreme Court file. As I indicated earlier in the application I am prepared - or I do wish to deal with those issues that are before me and I will accept material that has been filed in the Supreme Court proceedings to this proceeding or at least copies of that material if the originals can't be secured.
MR KELSO: My instructing solicitors, your Honour, will be able to get that material and circulate it- - - -
FEDERAL MAGISTRATE: If they could.
MR KELSO: - - - - I'm told by 4 pm tomorrow.
FEDERAL MAGISTRATE: I'd appreciate that thanks, Mr Kelso. That then just leaves me to address the matter that - the final matters that need to be agitated without any sense seeking to bind myself or without foreshadowing the outcome of the application.
At this stage it seems that only matters that I think I'll need to hear evidence on will be matters that concern the declarations of trust in respect of the chattels, being the jeweller and the furnishings.
Now, again, with Ms George not being here I'm not sure how we're going to convey to her my observations about these matters today. Perhaps efforts could be made to let her know that I'd be expecting to hear her evidence on that matter when we commence on Monday.
I hope what I - subject to any submissions that might be made, what I propose to do is to deliver the reasons for judgment hopefully by Friday afternoon, if not by Friday or early Monday morning and then you can have a couple of hours to reflect upon the matters there and we can then proceed to hear the evidence as I say, that deals with the issues that I think need to be agitated orally.
43 After the mention on 4 February 2009 and under cover of a letter of that same date, the solicitors for Dr Ironside and DPIPL lodged with the Federal Magistrates Court and copied to the other parties in the proceedings in that court copies of affidavits which had been filed in the Supreme Court on behalf of their clients and which, in their opinion, "ought to be placed before his Honour". They did this in accordance with what they apprehended to be a direction made on 4 February 2009 by the learned federal magistrate. On 6 February 2009 Mr Humzy-Hancock a solicitor in the employ of the solicitors for the bankruptcy trustee swore and caused to be filed in the Federal Magistrates Court an affidavit to which he exhibited what he swore were true copies of the affidavits which had been filed on behalf of Ms George in the Queensland Supreme Court proceedings. He did this in compliance with an undertaking given to the Federal Magistrates Court on behalf of the bankruptcy trustee at the mention on 4 February 2009.
44 On 9 February 2009 the learned federal magistrate delivered reasons for judgment in respect of the summary judgment application. Ms George did not appear that day. Having delivered judgment in respect of the summary judgment application, his Honour went on to deal with other issues in the proceedings with which we are not concerned.
45 In his reasons for judgment, the learned federal magistrate summarised the "Background Facts", as revealed by the material before him, in relation to the Moggill property as follows:
18. For many years prior to the relevant marriage the bankrupt worked in the banking industry. She lived in South Australia and had acquired property in her own right. It was said that at the time of her marriage she had at various times owned four pieces of real estate in South Australia.Although not strictly material to this application I note that in her matrimonial proceedings before Barry J in 2005 her evidence (which was accepted on that point) was that at that time she owned a property at Karsbrook with her first husband. There does not appear to have been evidence of the other three properties although I note there was reference in evidence by her to a unit. Evidence of the other holdings was not in dispute.
19. The realisation of her real estate holdings was said to have provided the source of funds which were eventually available to her and her second husband to purchase the former matrimonial home at Pullenvale. That property was purchased in 1998 and registered in her name. It was accepted by Barry J that the property was purchased solely in her name for appropriate reasons. Despite it being purchased solely in her name His Honour accepted and treated it as matrimonial property for the purpose of the property proceedings between the bankrupt and her former spouse although he did accept "a large proportion of the funds used as equity for the Pullenvale property came from the [bankrupt]" although "to the extent of $200,000 as claimed, I am unable to (find)".
20. After the bankrupt and her husband separated in 2001 the bankrupt unilaterally liquidated the Pullenvale property realising a sum of approximately $743,000. She used part of the funds to acquire the Moggill property which was then vacant land. The historical search reveals the registration of transfer occurred on 23 December 2003 and a certificate of title then issued. A mortgage with the National Australia Bank was registered on 14 July 2004. This approximates with the date of contract for the construction of a house on the Moggill property. Although the bankrupt referred to the construction agreement as being executed in about June 2005 (T page 191 line 5) it seems likely that the reference to 2005 is in error as I note from the contract of sale executed on 18 June 2005 that the "present use" of the property was noted as "residential" and it purported to provide for a long term lease-back arrangement. It is unlikely that such an agreement would have been concluded in the absence of the construction of the dwelling upon the property.
21. From the chronology provided in the Family Court proceedings it is apparent the property was acquired prior to the resolution of that dispute and accordingly remained matrimonial property as defined.
22. As contended by the Trustee it is plain the bankrupt could not have had title of the Moggill property to convey to any third party interest in that property as trustee or otherwise at least until after the orders of Barry J made on 29 April 2005.
23. It follows the Moggill property, which by that time appears to have included the completed residence, was from that time capable of disposition by the bankrupt but not before.
24. In June 2005 the bankrupt in her own right entered into a contract to sell the Moggill property to the second respondent Dr Peter Ironside Pty Ltd (DPIPL) for a sum of $400,000. The contract was not subject to any encumbrances but did include provision for a 30 year tenancy agreement in her favour at a set rental. The bankrupt contends that at the same time a collateral agreement to transfer the property back to her by DPIPL was also concluded.
25. On 14 September 2005 a memorandum of transfer giving effect to a contract of sale dated 18 June 2005 was executed by the bankrupt as a vendor. Shortly before this time on 27 August 2005 the hand written memorandum of transfer providing for a transfer of the Moggill property by DPIPL to the bankrupt in trust for Alexander George of a "fee simple life estate" (sic) was executed by DPIPL. It is to be noted that there was no formal contract in writing prepared in support of that transfer. The consideration was noted on the transfer to be "$400,000 (four hundred thousand dollars) on or before death". There was some debate about the nature of the interest transferred i.e. whether it was fee simple or merely a life interest but for present purposes that matter is not material.
26. Only the transfer from the bankrupt to DPIPL was ever registered. The evidence does not suggest that any third party ever had notice of the unregistered transfer executed by DPIPL on 27 August 2005.
27. In the meantime relations between Dr Peter Ironside and the bankrupt's sister, Susan Jane Wilson (formerly Ironside), soured. They separated and commenced property proceedings in the Family Court. The Moggill property formed part of the matrimonial estate in that proceeding. The bankrupt sought to intervene in those proceedings to protect her claimed interest. The interest claimed by the bankrupt was in respect of the Moggill property itself. The terms of the heads of agreement made the subject of orders of 26 February 2008 in the Federal Magistrates Court in the Ironside proceeding relevantly provided:
2. (Dr Peter Ironside) shall do all acts and things reasonably necessary and whether in his personal capacity as director or as shareholder of (DPIPL) so as to ensure that the total mortgage debt secured by the National Australia Bank upon the property situate at 130 Land Place, Moggill in the State of Queensland is not more than $500,000...as at the date of sale contemplated by the heads of agreement.
28. Otherwise the bankrupt as intervenor abandoned any claims "whether on her own account or as trustee with respect to the (Moggill) property."
29. In the meantime the Trustee had become aware of the Ironside proceeding and the bankrupt's intervention in it. The Trustee in turn intervened as the bankrupt's trustee. As the Ironside proceeding was settled without need for judicial intervention the Trustee was able to negotiate a suitable outcome which involved the transfer of the Moggill property to him.
30. The bankrupt was also party to the Heads of Agreement and appears to have agreed its terms.
31. By reason of the Heads of Agreement the Moggill property was transferred to the Trustee pursuant to a memorandum of transfer executed on 2 April 2008.
32. However shortly after that time it appears the bankrupt recanted on her earlier position agreed by the Heads of Agreement and sought to lodge a caveat to prevent registration of the transfer.
33. In a letter written in support of the caveat the bankrupt claimed the Moggill property ought to have been registered in the name of the bankrupt as trustee for Alexander George.
46 In addition to the facts summarised in this excerpt some further facts elsewhere referred to in the learned federal magistrate's reasons for judgment should be mentioned. His Honour (at para 84) makes reference to the following allegation in para 2(e)(xvii) of Ms George's amended statement of claim of 19 December 2008 with respect to the Moggill Property:
(xviii) The resulting trust dated 27/11/97 was declared by parole on this date and further declared in writing by trust deeds dated 11/5/2002 and 5/12/2003 and those trusts deeds disclosed above in part 2 along with affidavits dated 26 September 2008. [sic]
47 After that reference, his Honour stated (at para 85), "Despite numerous requests made of the bankrupt no trust deed dated 1997 has ever been produced by her. She has been afforded numerous opportunities to present such a deed which (prior to her most recent pleading) she maintains exists." With all due respect, if there were a trust originally created, as Ms George alleged, "by parole", the absence of any written declaration of trust in 1997 is hardly surprising. Further, it does not follow that a trust originally created by parole in respect of property in 1997, could not have later been evidenced in writing. It is not necessary to dwell further on this aspect of the reasons for judgment for, as will be seen, there is error enough in the way in which the two alleged written declarations of trust put forward by Ms George were dealt with.
48 Each of these alleged declarations took an unusual form. As to the trust declaration dated 1 May 2002 (the reference to 11 May 2002 in the pleading is a transcription error) and for the purposes of determining the summary judgment the learned federal magistrate accepted (at para 87) the following:
On 1 May 2002 the bankrupt endorsed a copy of the then current reprint of the Trusts Act 1973 (Qld) ("the Trusts Act") (Reprint 4A) with the following words:
"Property trust 130 Airley Road Pullenvale Queensland 4069 Lauren Kay Cordes as trustee for Alexander William George dated 1st May 2002 holding a life interest of mother/child referred to as above dob 4/7/1964 and _/11/1997 respectively.
1-2-2002 Lauren Kay Cordes
__________________________________
dated Signed Trustee"
49 His Honour likewise found (para 88) that there were no other markings on the balance of this reprint of the Trusts Act.
50 As to the trust deed dated 5 December 2003, and again for the purpose of determining the summary judgment application, the learned federal magistrate found (para 110 - 112):
110. In December 2003 part of the proceeds of the Pullenvale property were applied by the bankrupt to the acquisition of the Moggill property. The bankrupt entered into a contract to purchase the Moggill property on
5 December 2003. There was no suggestion of any third party having an interest in that property together with her at that time.
111. On the same date as the contract to purchase that property the bankrupt endorsed a copy of the then current reprint of the Trusts Act(Reprint 4B) with the following words:
o "Property trust agreement amendment original trust agreement dated 1 May 2002.
o Lauren Kay Cordes as trustee for Alexander William George property trust lot 13 Survey Plant 145714 County of Stanley Parish of Moggill dated 5 December 2003 holding life interest of mother and child on the above property --- Lauren Kay Cordes."
112. The bankrupt contends that this effected a variation of the May 2002 trust in particular by the substitution of the Moggill property for the Pullenvale property as the relevant trust property.
51 In respect of the Moggill property, Ms George's case was that it had been acquired with the proceeds of a property at Pullenvale of which she was the registered proprietor. On 1 May 2002 she had declared in writing in the terms indorsed on the copy of the Trusts Act, that she held that property on trust. In turn, the proceeds of the sale of the property at Pullenvale had been used to acquire, in 2003, and thereafter to improve the Moggill property.
52 In her amended statement of claim and as summarised in the passage which we have quoted from the joint judgment in the Queensland Court of Appeal, the Moggill property was later the subject of an alleged arrangement between Ms George as trustee, Dr Ironside and DPIPL.
53 So far as the administration of Ms George's bankrupt estate is concerned, the importance of whether the Moggill property was, at the commencement of her bankruptcy, held in trust lies in the exception for which s 116(2)(a) of the Bankruptcy Actprovides to the general rule, stated in s 116(1)(a) of that Act. The general rule is that:
(a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by him or her, or has devolved or devolves on him or her, after the commencement of the bankruptcy and before his or her discharge.